Mr. Kofi Nyamekye, the General Manager of Agyengo Ltd has been nomination by the president to be the Municipal Chief Executive of Ho Municipal Assembly. He is required to obtain a Tax Clearance from the GRA as part of the conditions for approval.

He subsequently field his 2009 returns which was outstanding and indicate the following:

(a)         Basic annual salary of GH¢ 40,000

(b)         well- furnished rented flat provided by his employer in respect of which he pays GH¢ 50 per month as rent.

(c)          watchman allowance of GH¢1,600 per annum, paid directly to him.

(d)         Risk allowance is 15% on basic salary

(e)         Leave allowance of GH¢ 10,000 per annum

(f)              Garden Boy allowance of GH¢200 per quarter paid directly to him.

(g)          Medical allowance of GH¢ 1,800 per annum.

(j)                         Special retirement package of which he contributes 5% of basic salary, which the company pays 10% of his basic salary.

(k)                        Two maidservants each on wages of GH¢ 1,200 per annum. The amount is paid to the maid servants directly by the company.

(l)                         Bonus of 20% of annual basic salary

)                           Entertainment allowance of GH¢600 per month

(n)                        Duty post allowance of GH¢ 400 per month

(o)                        He has Life Assurance Policy with Enterprise Insurance Ltd. The details are as follows:

              Policy                                 Sum Assured(GH ¢)                         Premium(GH ¢)

                 A                                                  5,000                                                  125

                 B                                                  4,000                                                 320

                 C                                              15,000                                                1,875

(p)         He is entitled to company car ,driver and fuel for both official and private use.

(q)         Kofi indicate that he has two wives and six children. All the children are Senior High School in Ghana.

(r)              The returns showed that GH¢13,210.50 has been deducted at source and paid to GRA.

(s)         He is a contributor to the social security scheme.

Required

(i)           Compute his tax liabilities for 2009 year of assessment.

(ii)          determine his tax payable to be refunded for 2009.

Note                    2009 Tax Rates – Individuals Chargeable

                                                          INCOME                                          RATE                                  TAX

                                                           GH¢                                                                                          GH¢

First                                                   240                                                  free                                       -

Next                                                  240                                                    5%                                     12            

Next                                                 1,200                                                10%                                    120

Next                                                 7,920                                                17.5%                                1,386

Exceeding                                       9,600                                                   25%